What is CDW for Car Hire?
Hello Car Hire Seekers!
I am often asked this question by my colleagues and friends. What is CDW insurance for car hire? The easy answer; CDW is a collision damage waiver. Now for the hard answer…
A collision damage waiver, also known as loss damage waiver, CDW or LDW is for some people a very confusing part of the car hire process. If you go to any major car hire company website or to a broker website, they will tell you not to worry and that CDW is included in every rental.
Really? Great! But what is it!?!?!?!?!
Some places will try and tell you that it is an insurance policy while others will really try and make you believe it is some magical power that guards the car hire against collisions. Ok not really, but here is what CDW actually means.
When you sign the agreement for a car hire and the CDW is included, it means the independent car hire company gives up or “waives” their right to collect a high deductible from a driver in the case of an accident. However, it does not mean that the driver is exempt from paying any deductible. In effect, the CDW will greatly reduce the amount of money the driver needs to pay in the event of an accident or “collision” with the car hire. Without CDW, the deductible can be upwards of 2000 GBP or more! With CDW that amount is dropped to about 100 to 200 GBP. At one time, CDW was optional, but now it is mandatory for every company. It is a good money maker from the car hire companies because they have to pay the same deductible to the insurance company either way, with CDW they simply alleviate the driver’s risk.
But have no fear because the cost of CDW is very cheap. Usually it is about 10% of the total car hire price, but it buys peace of mind as well as financial protection. Since you cannot escape the CDW, it is better to just understand it and live with it. In 99% of car hire holidays, CDW does not come into effect, but if you are in that one percent that needs the CDW, you will be glad to have it.
The other option for CDW that might be attractive to some people is referred to as “Super CDW.” The car hire companies will almost always ask if you want to purchase extra (super CDW)coverage when you are picking up the car hire. Although the name is laughable, the super CDW will reduce the deductible amount to zero, zilch, nil, NOTHING. Be prepared to pay an extra 10% of the final car hire price for super CDW. That means the super CDW plan is roughly 20% of the price of the total. Not bad, but for most drivers, the normal CDW will be sufficient.
There you have it, CDW in a nutshell, although a pretty big nutshell. Questions? Comments? Concerns? Stories? I am sure other people would be happy to hear about some personal experiences of CDW cases.
And so would I!
